therefore, consisted in the market value of the entire product, then no glut could arise from an increase of productiveness; either in respect to any one or to all commodities, until all the participants had received enough of them for their use, until more of them had been produced than is required by society."

Marx, in the second volume of Capital, expresses the same theory thus: "The production of surplus value, and with it individual consumption may be in a flourishing condition, and yet a large part of the commodities may have entered into consumption only apparently, while in reality they may still remain unsold in the hands of the dealers; in other words, they may still be actually in the market. "Now, one stream of commodities follows another, and finally it becomes abvious that the previous stream had been only apparently absorbed by consumption. The commodity capitals compete with one another for a place on the market. The succeeding ones, in order to be able to sell, do so below price. The former streams have not yet been utilized when the payment for them is due. Their owners must declare their insolvency, or sell at any price in order to fulfill their obligations. This sale has nothing whatever to do with the actual condition of the demand. It is merely a question of a demand for payment, of the pressing necessity of transforming commodities into money. Then the crisis comes."

H. M. Hyndman, one of the foremost Socialist scholars of England says: "The times of greatest distress for the mass of the people now, are the times when there is a complete glut of the commodities which they need and which they make."

By far the clearest and most graphic of all the statements of this theory is the one by Engels, in his reply to Duehring: "Since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and exchange among all civilized peoples and their more or less barbaric hangers-on, are thrown out of joint about once every ten years. Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a

perfect steeplechase of industry, commercial credit, and speculation, which finally, after breakneck leaps, ends where it began -in the ditch of a crisis. And so over and over again."

Professor Jones describing Rodbertus' theory, very cleverly depicts and illustrates the futility of the methods adopted by capitalists to stave off the panic: "The accumulation of a surplus implies a curtailment of the market. The attempt to employ this surplus productively calls for an expanding market, and if this is not found the profits of capital invested in production begin to fall. So long as the capitalist attempts to prevent this fall of profits by reducing wages, he reduces the demand and tightens the noose which strangles industry. Like the backing horse with the lines wound around the hub, every movement to comply with the apparent demands of the situation only tightens the pressure."

The women workers of New York held a meeting in 1893 to discuss the panic of that year. They were not economic scholars, but they concluded from their own observations that the only hope was in the consumption of the things which still remained on the overloaded market. They said to their messenger to the rich women of the city: "Tell them not to cut off their luxuries."

That the present panic, like the rest, is the consequence of overstrained markets, seems to be the opinion of the Wall Street Journal, which has about the best news service in the world. The issue of Friday, Nov. 15th, contains the following:

"Ever since the beginning of the year, thoughtful observers of the situation have been looking for a contraction of business. These observers, however, were mostly in the East and in closer touch with the strictly financial conditions, so that they could. feel the strain which was being experienced in all the international markets."

So, "the ditch of a crisis" is the result of the gap between the price of labor power and the value of the commodities which that labor power produces. The trust may regulate industry and modify the anarchy in production, but it can not reduce that gap. On the contrary it does actually widen the chasm by increasing the productivity of labor more rapidly than it increases wages, thus increasing the ratio in which labor is exploited, and, though wages remain stationary or even advance, really reducing the worker's purchasing power relatively to the increased value of his labor products.

So, "the vicious circle," in spite of all that trusts can do, grows more vicious, and its movement as Engels says: "becomes

more and more a spiral and must come to an end, like the movement of the planets, by a collision with the center."

The one insoluble problem of capitalism is to dispose of its surplus products. They remain in its system, producing convulsions, which must eventually result in its death. Its hopeless inability to reconcile that contradiction guarantees the impossibility of its perpetuation.

The soil is prolific as ever, the bowels of the earth teem with the fuel and metals which men require. We have the most highly productive machinery the world ever saw, and workers by the million beg the chance to keep the wheels revolving. Society possesses everything necessary to abundantly supply all the wants. of all her children. But class ownership of the means of production grips her like a palsy, and poverty stalks abroad in the midst of plenty.

Says Rodbertus: "What, then, should society do? She must step out of this fatal circle, in which she is driven about by prejudices alone, and replace the 'natural' laws, in so far as they are harmful, by rational ones! For this she needs but clear vision and moral strength! It is the part of political economists to sharpen the first. Should the last be lacking for a free resolve, history will indeed have to swing the lash of revolution over her again." ARTHUR MORROW LEWIS.

EDITORIAL

What of the Future?

Last month it was a question as to whether there would be an industrial crisis. That question is now settled, unfortunately in the affirmative. The crisis is now upon us. From all directions come reports of countermanding orders, discharging of men, reduction of output, closing down of shops and all the other signs of an industrial crisis.

Steel, long taken as the barometer of industrial prosperity has been the first to feel the shock and has given forth the most striking manifestations of the falling market. The iron trade journals announce that the United States Steel Corporation has cut its production fully one-half with the prospects of reducing it further in the immediate future. Railroads announce a declining rate of income in spite of the rapid increase of population in the localities which they traverse.

The giant bluff of the bankers seems to have succeeded. They have issued Clearing House certificates, had holidays granted and in every way made sport of the law and order of which they ordinarily are the most ardent defenders. The United States Government finally came to the rescue with an issue of fifty million dollars of Panama Canal Bonds, and one hundred million dollars certificates of indebtedness. This is the first time that the national debt has been increased in time of peace, save when President Cleveland took similar steps on a much smaller scale during the panic of 1893.

There has been much discussion among Socialists as to the cause of this panic. Some have even shown an inclination to throw overboard the well known explanation that it is due to the constantly widening margin between the consuming power of the workers and the amount of surplus value derived from exploitation. Several Socialist writers have expressed themselves that this theory had already been discarded though just who discarded it and when, none have stated. A fairly careful examination of such works of Marx as are at hand fails to show any place where he rejected it.

In the second volume of "Capital," pages 86 and 87, his position is stated as follows:

"Thus the production of surplus-value, and with it the individual

consumption may be in a flourishing condition, and yet a large part of the commodities may have entered into consumption only apparently, while in reality they may still remain unsold in the hands of dealers, in other words, they may still be actually in the market. Now one stream of commodities follows another, and finally it becomes obvious that the previous stream had been only apparently absorbed by consumption. The commodity-capitals compete with one another for a place on the market. The succeeding ones, in order to be able to sell, do so below price. The former streams have not yet been utilized, when the payment for them is due. Their owners must declare their insolvency, or they sell at any price in order to fulfill obligations. This sale has nothing whatever to do with the actual condition of the demand. It is merely a question of a demand for payment, of the pressing necessity of transforming commodities into money. Then a crisis comes. It becomes noticeable, not in the direct decrease of consumptive demand, not in the demand for individual consumption, but in the decrease of exchanges of capital for capital, of the reproductive process of capital."

Boudin in his discussion finds no new theory of crises in Marx aside from this so-called orthodox one. Hyndman's theory of crises lays more emphasis on the limitation of gold than on the lack of the consuming power of the workers, but he does not by any means suggest that the theory as stated above has been discarded by Socialists. In Jones' work on crises, by far the most elaborate in the English language and which is based on by far the most exhaustive study and reading of the subject ever made, he rejects the "over-production" or "under-consumption" theory only because its acceptance implies the labor value theory, an objection which should not be offered by Socialists.

It is true that in the process of circulation of capitalist production as expressed by Marx in his famous formula M-C-M (Money-CommodityMoney) that there is a stage in which the amount of the circulating medium and the manner in which it is used have a great influence. But to imply that a great fundamental upheaval like the present one is caused by a manipulation of the money of a country is to reject the whole philosophy of the Ecoonmic Interpretation of History.

The theory that seeks to explain the present crisis by an insufficient volume of currency is especially weak since never in the history of the world have there been such rapid additions to the gold supply of the world as during the ten years which have just past. Extensive discoveries in the Klondike, in South Africa, Australia and the United States have added new sources of supply. Of even more importance have been the inventions and application of the great mechanical dredges and the improved cyanide process of reducing low grade ores. These have made possible the utilization of low grade placer and quartz deposits respectively and have made gold mining a prosaic manufacturing industry instead of an adventurous lottery.

During this same period the credit system has been increasing and